In a frustrating market of economic headwinds and high interest rates, decoding today’s luxury high-rise consumer is challenging for any developer. How does one determine what the luxury buyer wants in 2023 and beyond?
This was the first topic tackled on the first day of Elevate, an exclusive event that explored the art of living in high-rise buildings in early December in Miami. The event was put on by Zonda and Livabl, as well ARCHITECT and Multifamily Executive magazines.
Kimberly Byrum, managing principal, multifamily, of Zonda Advisory, opened the day and moderated the panel. David Diestel, CEO of FirstService Residential; Peggy Olin, CEO of OneWorld Properties; and Nelson Stabile, principal and co-founder of Integra Investments, discussed the specifics of the various markets.
Who’s on Top in Miami?
Byrum began by asking about the luxury high-rise for-sale market in Miami and what makes it unique.
Olin explained there’s a difference between the Miami luxury high-rise market and the rest of the United States. “One year, it could be the Brazilians reigning [in the Miami market]; the next year it could be Colombia or Mexico. It all depends on what is happening in their respective countries, and Miami benefits.”
“We also benefit from the increasing U.S. demographic,” Olin said. “When we look back at 2018 or 2019, approximately 95% of our buyers were from international destinations. Today, that number has dropped to 75% because 25% are now from the United States.”
Stabile confirmed that his firm is experiencing similar trends.
“We have a project in the presale stage right now called the St. Regis Miami,” Stabile said. “Ten years ago, it would have predominately been foreign buyers and investors looking in the downtown market for second homes. Now, what we’re experiencing is a change in percentages. We’re seeing north of 60% of sales to domestic buyers. We would have seen 20% to 25% purchasing for primary residence purposes in the past. Now, 75% are buying these homes as primary residences, and only 25% are purchasing a secondary home.”
Making the Right Amenities Work
Byrum asked about how to discern which amenities work best versus those that might end up going unused. Knowing which amenities work as opposed to wasting space is critical.
“Table spaces are wonderful,” Diestel said. “Wellness spaces are desired in every community.”
“It goes back to understanding consumers. Wonderful food and beverages always work, but it depends on the buyer. Sometimes, it’s a great grab-and-go coffee place when the building is placed in an area containing urban commuters. However, consumers want a buffet breakfast service in some residences, such as here in Miami.”
All three agreed that receiving packages from companies such as Amazon is an underserved area in luxury high-rises.
“When it comes to packages, when I think of the luxury communities in the past, packages were received,” Diestel said. “Today, they’re delivered to your home because people want that instantaneous access. Also, in some properties, we see butler doors where you can deliver a package and leave it inside.”
Byrum wrapped up the panel by inquiring about waterfront access for luxury high-rise consumers. Marinas are proving to be a hot amenity, particularly in cities such as Miami with waterfront access.
“Marinas have been a great amenity for condos,” Stabile said. “If you can get a building on the water, especially in this post-COVID era, everyone wants to be outdoors. We started investing in marinas in 2015 for one of our communities as a hobby, and it’s since become a huge part of our business.”
“After analyzing the business in the first years when we acquired our initial marinas, we understood that there’s a great deal of room in that space coming from the luxury condo and rental market. The goal is always to provide everything that your buyers could want or need.”
